Michels Patisserie - Vide Case Study

Lessons learnt form video case studies • If business has large market share in Australia (i.e. Michel’s Patisserie), necessary to look internationally for future growth opportunities • Important to properly assess number of different markets • Depending on nature of product, it is generally valuable to expand into an English speaking country, which is either culturally similar to Australia, or open to western culture, has stable government, and has a similar legal system (particularly for franchise agreements) • Luxury products – instead of looking at just population size, should also look at income, and consumption patterns • Be prepared to change products and business model in the foreign market if an Australian approach is not working • Educate customers of products (especially if culture is not aware of western products  i.e. cake and coffee from Michel’s Patisserie in Shanghai • Exporters sometimes face enormous costs in setting up ventures internationally, such as Katherine Brimblecombe-­‐Fox, however she was able to enlist the help of Austrade and other export agencies to help her in terms of monetary grants and advice • Luxury items (such as Katherine Brimblecombe-­‐Fox’s paintings) do well in wealthier markets (i.e. London and Dubai), therefore it is important to properly research potential markets on a number of different characteristics to increase chances of success • Domestic success is considered an important factor in international success as products have been road tested first (i.e. Aromababy) but this is not always the case if the products are designed to be global from the beginning (i.e. Julianne) • Over long term, reactive approach to exporting is not sustainable (i.e. Aromababy) due to complexities of international expansion and therefore to deal with both domestic and international sales it is important to plan • As interest grows internationally, it is important to be systemic and plan, especially when trying to break into difficult markets such as America • Important to protect IP however possible in the countries you are dealing with • Having a strong, trusting relationship with distributors is the best defence against competition, because most of the time it is inevitable that competitors with produce similar, cheaper products • Important to foster relationships through face-­‐to-­‐face contact, rather than just email • Treat relationships as long term, and help distributors in anyway possible, whether that is in the form of additional marketing support, or maintaining a high industry profile  Aromababy • Tourist attraction considered to be a service – therefore there is added issues which include intangibility, inseparability, heterogeneity and perishability, and therefore the marketing mix should include people, processes and physical evidence • International expansion is usually considered after a firm has exhausted all opportunities in the domestic market, which was the case for Oceanis, as there was no more room for domestic expansion due to Australia’s already high number of aquariums per capita • Difficulties faced by small/medium sized that are not faced by large businesses o Limited financial resources  expansion may rely on firm generating finance externally o Smaller firms typically do not have a high number of employees, and therefore may struggle in allocating staff to manage multiple international activities as well as domestic activities o Smaller firms often have limited international experience and therefore often face a steep learning curve

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A range of useful partnerships can provide network support for firms engaging in international business For a small company (such as Driza-­‐Bone) costs associated with direct overseas production of products may not initially be viable, and instead the most viable option for entry into a foreign market would be to export products from Australia Exporting allows small firms to remain in control of the manufacture of the product Increasing competition in the global market, due to the fact that national borders are less defined Already existing brands are expanding product ranges, and therefore new competitors appear all the time due to low entry barriers Clothing industry  must consider changing global fashion trends, and seasonality in different countries Also face challenges when it comes to legal environments and volatility of currency rates Competitive advantage is important, in terms of differentiation or cost leadership To be successful it is important to adopt a planned approach to exporting and growth Barriers to entry in the online market are very high once one firm begins to dominate Differentiation for Wotif.com provided them with a competitive advantage Many firms initially expand to New Zealand, because it is close and also an English speaking country, while still providing the challenges associated with international expansion, such as dealing with foreign currencies, different credit card suppliers, and different tax and reporting regimes. Gives companies a taste of things to come as they continue to expand further offshore High quality information channels are important, between both suppliers and customers, allowing Australian manufacturers to maintain relationships with customers, and keep up to date with current market trends and new technologies It is important when thinking about entering an international market, to conduct extensive research, and work with different organisations and resources to gain a full insight into potential markets In order to have the best possibility of success, it is useful to identify customers with technology gaps that your particular organisation can fill. Strong communication skills are also imperative when expanding overseas, and it is important to build relationships Advantages of expanding internationally first, and then taking on a domestic presence o Take advantage of differences in seasonality (i.e. if your selling swimwear, do not have to wait for Australian summer) o Use meetings with overseas buyers to test quality of products o Having received orders fro international buyers made local retailers more willing to stock products, b/c Australian buyers closely follow international trends Disadvantages of expanding internationally first, and then taking on a domestic presence o Do not have an existing customer base to use as references o If the company is a start up they have a very steep learning curve Importance of trade shows  they provide firms with exposure to a large number of buyers, without having to make individual appointments Outline to buyers why they should choose your products over the other offerings, by telling them how your product is different/added benefits of your product Small firms such as Promotions in motion may face challenges in terms of exporting, however engagement in export operations is vital to compete within the increasingly global market place Productions in Motion may struggle to properly identify a suitable market due to limited time and financial resources that they may have available to dedicate to researching and visiting various international markets

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However, although Productions in Motion may face significant hurdles as previously outlined, this does not mean that it is impossible, granted they see the right help and advice from relevant organisations such as Austrade, and other trade organisations, which exist internationally Guerrilla marketing is very relevant to Australian exporters, as many exporters don't have the budgets to compete with the marketing used by large American companies, because they cant buy advertising time on TV, or a page in a newspaper Important to look for advertising in editorials in magazines targeted specifically to the target market  essentially free advertising